The present invention relates to the distribution, redemption, authentication, and clearing of coupons and the like. More particularly, the invention relates to a highly effective and efficient method and apparatus whereby coupons (such as cents-off merchandise coupons) can be redeemed, authenticated and cleared electronically.
Discount coupons (for example, “cents-off” coupons, rebate coupons, special offer coupons, or the like, collectively referred to herein as “coupons”) have become an integral part and a popular means of marketing strategies for many products, particularly retail consumer goods, sundries, foodstuffs, hardware, clothing and the like. Such items are typically sold at local grocery, drug, and discount stores. Product manufacturers have come to rely upon coupons, rebate and gift certificates or the like to promote new and existing products, boost sales, and obtain demographic information concerning consumer buying patterns. Consumers use coupons to reduce costs.
For example, in 1992, approximately 310 billion coupons were distributed, with 7.7 billion coupons redeemed, saving consumers approximately 4 billion dollars. It has been estimated that coupons, coupled with advertising, can increase sales by as much as 500%. A typical coupon marketing scheme involves printing the coupons in the newspaper or inserting coupon inserts into the newspaper, and allowing consumers to bring the printed coupons to a store for redemption. Other means of distributing coupons include printing or inserting in magazines, or other publications, by direct mail methods, and on products distributed at retail establishments.
Known couponing techniques have several drawbacks, not the least of which are low response rate, fraud, and high administrative processing costs. Low response rates are due in part to the difficulty a consumer has in maintaining, cataloging, and finding appropriate coupons before or during shopping. Moreover, since many coupons have expiration dates, a consumer has to not only catalogue each coupon by its product type, but also catalogue the coupons to ensure that redemption occurs before an expiration date. Since such techniques are time-consuming and cumbersome, the response to coupon campaigns has been limited to consumers who are on a budget or consumers who use coupons as a hobby. Accordingly, there is a need in the industry to simplify the process of coupon use by increasing the response rates, while at the same time, reducing consumer management time and lowering the administrative costs of processing the coupons after they are tendered.
In coupon redemption, fraud can happen on two fronts. Fraud may occur when coupons are duplicated using state of the art color photocopiers. On the other hand, fraud can be committed by vendors or merchants that accept such coupons or participate in submitting duplicated coupons to the manufacturers for rebates without the underlying sales.
In addition, known coupon redemption techniques yield little, if any, useful data to product manufacturers regarding who is redeeming such coupons. Consumer demographic data is extremely valuable to a product manufacturer in determining which products to target to particular consumer groups (e.g., through particular advertising venues). Moreover, the manufacturer is stymied since such demographic data is unavailable to permit more efficient distribution of future coupons. Information relating to the buying habits such as frequency and monetary value of products purchased, and demographics of particular consumers or groups of consumers has tremendous market value. Such information could also be sold or traded for a profit.
Additionally, known techniques of couponing require substantial involvement by the consumer rather than decreasing the time a consumer spends in redeeming coupons. Furthermore, the known techniques require that consumers carry the coupons or the instruments containing coupon information each time they visit a participating store for their purchases. Therefore, there is a need for a coupon processing system that reduces the time a consumer spends handling the coupons. There is a further need for a coupon handling system that captures detailed data about consumers' habits that can be provided to a manufacturer to create better value of products and newer products to the consumer.